National Mortgage Rates for Feb. 3, 2011

Mortgages

Here's a look at the state of mortgage rates from Bankrate.com's weekly national survey of large banks and thrifts conducted Feb. 2, 2011.

Applications for home loans rose last week, and mortgage rates rose along with them, as the bellwether 30-year fixed-rate mortgage crossed the 5% threshold for the first time this year.

According to Bankrate's latest national survey, the 30-year fixed mortgage rate was 5.02%, compared to 4.97% a week earlier. It was the first time the rate was above 5% since the last week of December, when it was also 5.02%.

Other mortgages showed little movement, however. The 15-year fixed-rate mortgage was 4.29%, a gain of just 1 basis point from the week before. A basis point is one-hundredth of one percentage point. Meanwhile, a key adjustable-rate mortgage, the 5/1 ARM, was unchanged at 3.84%.

In the category of jumbo mortgages, or generally those over $417,000, the 30-year fixed-rate loan inched higher by 1 basis point, to 5.54%.

The MBA said its index of home loan demand was up 11.3% in the week ending Jan. 28, compared to the week before. The MBA's index for refinancing applications rose 11.7%. The gauge for home-purchase loans was up 9.5%.

Meanwhile, Freddie Mac said more of those households that are refinancing are paying for the privilege. So-called cash-in refis, in which the borrower brings money to get the deal closed, represented 46% of the total refinancing market in the fourth quarter, according to Freddie Mac. That's the highest since Freddie Mac began keeping records in 1985.

Homeowners appear to be locking in fixed rates while they are still relatively low, said Fred Nothaft, Freddie Mac's chief economist. He added that "many looked at their other investment options and chose to pay down a bit of their mortgage" when refinancing.

Also, many homeowners are underwater or have little to no equity, and have to pony up cash to pay off their first mortgage with their refinancing loan. Mortgage debt in America declined by $400 billion between 2007 and the third quarter of 2010, Nothaft says.

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